Dairy Milk
Image credit: Piqsels

Animal-Free Dairy Products Startup Perfect Day to IPO

Perfect Day, an alternative dairy milk company, is preparing to go public with a bang. It counts several well-known investors among its ranks, including Leonardo DiCaprio and Bob Iger, the executive chairman of Disney. The food technology startup has received sizable investments from the Canadian Pension Plan Investment Board. It has also received them from Temasek, a holding company owned by the government of Singapore.

In late September 2021, the company raised a $350 million Series D round ahead of its planned IPO. Perfect Day currently has a valuation around $1.5 billion.

The maker of dairy-identical milk proteins aspires to pave the way for an animal-free dairy industry. Upon founding the Berkeley, California-based company in 2014, co-founders Perumal Gandhi and Ryan Pandya envisioned a line of dairy identical products that were produced with environmentally friendly methods.

“When we first started this almost eight years ago, we had the simple goal of creating a way to make dairy without animals,” Pandya stated. “We quickly realized that we could maximize our positive impact for the planet and the global food system by applying our technology and know-how across the supply chain.”

Advantages to Conventional Dairy Production

Compared to conventional dairy production techniques, Perfect Day’s production methods reduce water consumption by up to 99% and reduce non-renewable energy use by up to 60%. The company’s flora-based process contributes to a significant reduction in greenhouse gas emissions. This empowers customers to purchase animal-free products from a company committed to sustainability.

In 2019, Perfect Day released its first product — an ice cream made from non-animal whey protein. Sold under the Brave Robot brand, the company’s flora-based protein ice cream is available at over 5,000 retailers nationwide.

Non Dairy Ice Cream
Photo by Usman Yousaf on Unsplash

Paul Kollesoff, a dairy product developer who has partnered with Perfect Day, believes the company has unique advantages. “By applying science and technology, we’re able to make better versions of the same dairy products consumers love. And of course, it’s more sustainable than other options on the market because that’s just what we do.”

In January 2021, Perfect Day entered into a partnership with NICK’s Ice Cream. The Swedish-style ice cream maker is launching seven new vegan ice cream flavors with Perfect Day, including Swedish Mint Chip, Karamell Swirl, and Choklad Choklad.

Perfect Day as Dairy Ingredients Supplier

In addition to selling consumer-facing food products, Perfect Day has positioned itself as an ingredients supplier to other businesses. Many of these businesses will use Perfect Day’s animal-free proteins for their own product development.

“We first got into the ingredient business because food companies, big and small, we were eager to work with the ingredients we had successfully scaled,” said Gandhi of dairy ingredients. “Today, something analogous is happening on the technology side. There are innovators all over the world with ideas and ambitions similar to our animal-free milk protein, but need help getting there. We’re standing up business models to be able to share our demonstrated capabilities in a way that maximizes upsides for all, yet ensures that Perfect Day remains at the forefront of our new industry.”

The Animal-Free Products Boom

Other companies with a mission to make animal-free products mainstream have recently gone public. Oatly, the maker of oat milk-based food products, IPOed at the beginning of 2021. Beyond Meat, known for its plant-based meat substitutes, IPOed in 2019. Beyond Meat’s share price has soared since its IPO.

Perfect Day hopes to go public within the 12 months. The IPO market is currently strong and buzzing with environmentally conscious companies. However, it is possible that the IPO market will cool down in the coming months, which could derail Perfect Day’s IPO plans.

How the Technology Works

Perfect Day’s technology produces milk proteins via microbial fermentation. Microflora, the tiny living organisms also found in probiotics, play an essential role in the process. Grown in fermentation tanks, the microflora convert a carbohydrate source such as corn sugar into flora-based dairy proteins.

A cow’s DNA sequence is used as a blueprint. This DNA sequence is inserted into the yeast-based microflora. The bioengineered microflora then undergoes a fermentation process that results in the production of whey and casein proteins, the same proteins found in cow’s milk. In other words, the microbial fermentation process is able to produce proteins indistinguishable from those in dairy foods.

New Products in Pipeline

The company recently launched its Modern Kitchen brand, which offers consumers a selection of vegan cream cheeses made with Perfect Day’s animal-free whey protein. The initial flavor lineup includes strawberry, spring onion & chive, and harissa pepper cream cheeses.

“I’ve dreamed of an animal-free cream cheese for years, and we’ve finally unlocked the flavor and texture that makes traditional cream cheese so darn good,” Pandya commented.

On the dessert front, Perfect Day recently announced a partnership with Villa Dolce, a supplier of gelato and sorbetto. Villa Dolce is a supplier to many top restaurants, casinos, hotels, and university campuses.

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Ryan Carpenter serves as Attorney and Managing Director of Carpenter Wellington. Ryan advises clients across a broad set of corporate and commercial matters.

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Carpenter Wellington PLLC

Carpenter Wellington PLLC

Ryan Carpenter serves as Attorney and Managing Director of Carpenter Wellington. Ryan advises clients across a broad set of corporate and commercial matters.

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